Piper Sandler reaffirmed an Overweight rating on Ford Motor Co. (NYSE:F) and maintained a $16.00 price target on Tuesday. At the time noted in the firms coverage, the target suggested upside from Fords then-current share price of $14.12, with the stock trading close to a 52-week high of $14.50 and having returned 61.71% over the prior 12 months.
The analyst house emphasized Fords progress in scaling revenue from software and services - an area where many established automakers have found limited traction. Piper Sandler singled out Ford among traditional brands for its advancement in this category, pointing to the Pro segments software and service agreements as a key contributor. Consumer-facing BlueCruise subscriptions were also noted as a growing revenue source.
Using InvestingPro data, Piper Sandler highlighted Fords strong free cash flow yield as a supportive factor that should enable continued investment in higher-margin software and service offerings, even as the company currently reports weak gross profit margins of 5.81%.
Looking ahead, the firm projects that Ford will produce nearly $1.7 billion in earnings before interest and taxes from software and service offerings by 2027, which would account for more than 15% of the companys total EBIT under Piper Sandlers estimates. The analysts noted that revenue from software and services has been a differentiator for newer manufacturers such as Tesla and Rivian, helping support higher valuations for those companies compared with traditional automakers.
In corporate results, Ford reported fourth-quarter earnings for 2025 that showed a split between profit and top-line performance. The company delivered earnings per share of $0.13, missing the consensus forecast of $0.18 - a negative surprise of 27.78%. Revenue, however, outperformed expectations: Ford reported $45.9 billion versus an anticipated $44.2 billion, a positive surprise of 3.85%.
Following the 2026 earnings guidance that aligned with market consensus, Piper Sandler reiterated its Overweight rating and kept the $16.00 price target, citing potential execution upside in Fords future results. Despite the EPS shortfall for the quarter, Fords share price displayed stability, recording a modest uptick in aftermarket trading. These developments reflect an assessment that the company retains financial flexibility and operational levers to pursue higher-margin software and service growth while navigating near-term margin pressure.
Note: This article reports on Piper Sandlers rating, projections, and Fords disclosed quarterly results as described above.